China's soaring oil use leads push for efficient, electric cars

In November 2013, a Beijing resident cycles past electric vehicles at a Green Source shop in eastern Beijing. The tiny three- and four-wheelers form part of an illegal, growing and sometimes bizarre-looking fleet of electric-powered mini-cars bought by drivers desperate to bypass the gridlock plaguing Chinaís cities. (Calum MacLeod, USA TODAY)

China’s soaring oil demand, largely due to its booming use of cars, is prompting the nation’s push for vehicles that run on electricity or get more miles per gallon.

In the last decade, its gasoline consumption has more than doubled – from 0.9 million barrels per day in 2003 to more than 2 million barrels per day in 2013 — and its annual car sales have skyrocketed from about two million to 18 million, reports the U.S. Energy Information Administration.

As a result, China has increased its oil imports, which have met more than half its petroleum needs since 2009, according to the EIA analysis this week.

To curb oil demand and the pollution that results from burning fossil fuels, China’s central government is moving to boost car fuel economy to 34 miles per gallon by 2015 and 47 mpg by 2020. Also, in its current five-year plan, it’s promoting “new energy vehicles” (all or partly electric) with an estimated $15 billion in investments in the next decade and a goal of producing and selling 500,000 by 2015 and one million by 2020.

Companies are jumping in to capture the market. Last month at the Beijing Auto Show, the Denza electric car made its debut, retailing for about $59,100. A joint venture between Germany’s Daimler and China’s EV maker BYD, the Denza is slated to start selling in September. This year, Tesla began selling its electric cars in China and Nissan Motor Co., maker of the Leaf, plans to follow with its “e30,” made under its China brand Venucia.

“The Chinese government has been offering many financial incentives” that are often matched by local subsidies, the EIA reports. For example, Beijing matches the central government’s subsidy of about $9,700 per electric vehicle, and other localities have offered free licenses plates, which can be costly for conventional gasoline-fueled cars.

Still, the EIA reports, alternative-fuel vehicles have yet to take off in China, accounting for less than 1% of total vehicle sales in a country that remains the world’s largest car market. Despite government subsides, they remain costly, have limited driving range and lack a robust network of battery-charging stations.

In his 2011 State of the Union address, President Obama said he aimed to put one million electric vehicles on U.S. roads by 2015 — a goal the nation is not likely to meet. Obama has also pushed to increase fuel efficiency, approving rules that will nearly double required miles per gallon for new cars and light trucks by 2025.